Who pays for the manager appointed by Chicken Guy to control the day-to-day operations of the franchised restaurant?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- **E.
Exercise of Option.** Within 10 days after the Purchase Price has been determined, Chicken Guy may exercise its option to purchase the Assets by so notifying Franchisee in writing ("Chicken Guy's Purchase Notice").
The Purchase Price shall be paid in cash or cash equivalents at the closing of the purchase ("Closing"), which shall take place no later than 60 days after the date of Chicken Guy's Purchase Notice.
From the date of Chicken Guy's Purchase Notice until Closing:
(1) Franchisee shall operate the Franchised Restaurant and maintain the Assets in the usual and ordinary course of business and maintain in full force all insurance policies required under this Agreement; and
(2) Chicken Guy shall have the right to appoint a manager, at Chicken Guy's expense, to control the day-to-day operations of the Franchised Restaurant, and Franchisee shall cooperate, and instruct its employees to cooperate, with the manager appointed by Chicken Guy.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, in the event that Chicken Guy exercises its option to purchase the assets of a franchised restaurant, Chicken Guy has the right to appoint a manager to oversee the restaurant's daily operations. The financial responsibility for this manager, including their salary and other expenses, falls solely on Chicken Guy.
This condition is specifically tied to the period between Chicken Guy's notice of intent to purchase the franchise and the final closing date of the sale. During this time, the franchisee is expected to cooperate with the manager appointed by Chicken Guy and ensure that their employees do the same. This arrangement allows Chicken Guy to maintain control over the restaurant's operations during the transition period, ensuring that standards are upheld and the business continues to run smoothly.
For a prospective franchisee, this means that if they ever decide to sell their Chicken Guy franchise back to the company, they will not be responsible for the costs associated with the manager Chicken Guy appoints during the transition. This can provide some financial relief and assurance during what could be a complex and uncertain time.